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Crypto Investing for the “Old Guy”
I’m sure you’ve seen 100 articles and videos by now explaining why Ethereum is going to be a very well performing asset over the LONG TERM. I emphasize long term because I am an “old guy” that started studying crypto currencies a while ago and I can’t understand the greediness, unfairness, unsustainability, or downright scams built into the structures of crypto projects. In creating returns, I believe in the building blocks of (P)rincipal, (R)ate, and (T)ime. I also believe that Time is by far the most impactful element. I believe that steady growth over time is much more attractive, sustainable, and rewarding than a meteoric rise of an asset followed by a crash back to zero leaving investors a little late to sell out in shambles. My approach isn’t nearly as flashy as coins that tout “200x in 14 days” or anything like that but slow and steady certainly wins the race.
If you are still reading after that first paragraph, we are of a like mind when it comes to investing and I want to lay out my case as to why applying a smart, slow and steady investment approach to this burgeoning crypto market can lead to some really attractive gains while remaining relatively safe in a crypto landscape that is fraught with landmines.
Why Ethereum?
With Bitcoin being the buzzword of the last 6 months why is Ethereum better positioned to offer safer and more stable long term gains than any other crypto currency? The first reason is market cap. Ethereum has a Goldilocks sized market cap. It’s just the right size to have a very minimal chance of going to zero, but still small enough to see some really nice gains as adoption and utilization rates increase. At the time of writing, the Eth market cap hovers around $150B. If Eth were a company it would be roughly the size of McDonalds ($158B) and bigger than UPS ($138B), or Wells Fargo ($135B). So the sheer size, adoption, and utilization of the network make it very unlikely to fall completely out of favor with investors and users. However, if you compare it to the $652B market cap of Bitcoin, there is still very much room to grow. Recent browser searches for Ethereum have also continued to rise, seeming to signal further increases in adoption and utilization rates.
The bull market run for crypto in the 4th quarter of 2020 and the 1st quarter of 2021 saw Bitcoin smash all time highs and even reach levels of twice its pre-2020 all time high. Ethereum enjoyed gains in price as well but even currently sit just under 90% of its all time high. This is another beacon that Eth has not made its full bull run during this current cycle.
The Ethereum blockchain network and the rise of the ERC-20 tokens adds so much utility for users by eliminating the need for a new token project to pour hundreds of thousands of dollars into things such as network security and marketing to drive users to their new project, app, or service. The network effect of the Ethereum name is tremendous and the ability of all sorts of new products, not just defi projects, to be built, relatively inexpensively on the network, are both reasons that Eth is not only here to stay but here to thrive.
Eth 2.0 is set to rollout within the year and moves the consensus building of the network from Proof of Work (PoW) to Proof of Stake (PoS). This is a very positive thing for the longevity and sustainability of the Ethereum network. The level of massive amounts of energy used, heat produced, and mega high start up costs of PoW networks are major barriers expansion of the network.
Why you should be trying to earn more Eth.
The never ending printing of the US Dollar is diluting the purchasing power of the currency by the day. The amount of money that will need to be printed over the next few years to cover just the Covid-19 Stimulus Package(s) alone could reach an estimated 15% per year, that’s after an estimated 24% of new USD being printed in 2020 according to Michael Saylor of MicroStrategies. I believe this is pushing the global financial community to look more seriously at crypto currencies that can offer fixed inflation or even zero inflation. This alone is why I started my crypto investigation and why I strive to earn more Eth, not more US dollars to buy Eth. The price appreciation of Eth from the reasons that I mentioned above coupled with the diluted purchasing power of the US dollar of the next coming years has me looking for ways to earn more Eth directly from my crypto investments.
Earning in Eth
The two best ways that I have found to earn more Eth directly is by becoming an Eth 2.0 validator through the new PoS protocol, and by staking ERC-20 tokens. Becoming a validator has the obvious upsides of being able to set up a validator node on a much more normal desktop computer (as opposed to running a PoW mining rig), the energy and operating costs are much less, the income is (mostly) passive and most importantly the rewards are paid in Eth. The big downsides are the protocol is at minimum a year away, and the staking commitment to become a validator is 32 Eth. At today’s prices that’s a $41,400 commitment. That is not an insignificant amount and that led me to the question of how does someone earn more in Eth that doesn’t have $41,000?
Staking ERC-20 Tokens
This led me on the most interesting part of the journey by far. There are literally hundreds of ERC-20 token projects and the array can be quite dizzying. A working definition of ERC-20 is any token that operates on the Ethereum network. You will trade Eth to obtain your ERC-20 token, usually through a decentralized exchange such as Uniswap, then you will either hold the token as a store of value or in my case stake the token to earn rewards (more tokens) then eventually trade those back on the exchange for more Eth than you started with. Staking is basically locking up your tokens for a period of time in order to earn interest over that period of time. This is beneficial for both the staker (earning interest) and the token project (creating scarcity which provides upward price pressure and reduces volatility). This process can happen with as little as $10, the very low barrier to entry makes investing in and earning more Eth possible for anyone. The problem is that the ecosystems of the various ERC-20 tokens run the spectrum of fair and nonprofit to actual scams that should get the founders and developers thrown in jail. Navigating this spectrum and being able to determine the “good” projects from the outright scams is essential and can mean the difference in losing your entire investment and earning long term slow and steady gains that can eventually lead to financial freedom if you are disciplined enough.
After an exhaustive search, I discovered that the WISE Token project is the perfect project for me.
WISE is the best way to earn Eth through staking
***In the interest of full disclosure, I am invested in WISE and none of the information in this article is financial advice. It is just my opinion. WISE and/or Ethereum have the potential to go down in value and you could lose some of your investment principal.***
The WISE Token, when staked, operates much like an Ethereum bond or certificate of deposit. Several features of the WISE Token make it the safest, most fair, token in the history of ERC-20 Tokens. First of all the WISE Foundation is a non-profit organization. After recouping a very small amount of Eth from the initial sale to cover start up costs, the WISE token development team makes no money from the holders of WISE. The smart contract that governs the transactions and staking of WISE tokens is fully completed, fully deployed, and completely unchangeable.
There are two major elements of WISE that make it unlike any other crypto in the space and a true pioneer of fair ecosystems within defi projects. First, the value of every WISE token is the first crypto truly backed by a real value asset (Ethereum). The massive pool of Ethereum liquidity (over 80,000 Eth) was placed on the Uniswap exchange by the smart contract and in the same transaction the liquidity provider (LP) tokens were sent directly to a burn address. LP tokens are issued to liquidity providers by the exchanges that host the liquidity pools so they can remove their liquidity at any time. Because the LP tokens were burned the pool of Eth that is backing up the WISE token project is unowned and thus cannot be removed by any developers or creators. For more information on why this is so revolutionary and so very important, do a quick search on “Rug Pulling”. The second aspect of WISE that makes is unlike any other crypto project is the invention of a price floor. This means that literally the value of the WISE token can never fall below a certain level of ETH. It can never go to zero. If you were to invest ETH into the WISE project you are guaranteed to get a portion of that ETH back, even if you are the very last person to sell WISE back to the liquidity pool. At the time of writing the price floor for WISE was around 50% of the current value. No one wants to imagine a 50% downswing in the price of an asset but in a nuclear doomsday type of event in which every single holder of WISE sold and you were the very last person to sell the very last WISE token back to the liquidity pool you would still receive 50% of the ETH that you invested back.
When you compare these 2 factors to any other crypto project where rug pulls are prevalent and/or even a portion of the holders selling could drop the price to zero, the advantages of the structure of WISE is apparent. There are a myriad of other factors (referral system, reinvestment of exchange fees to grow liquidity pool, how newly minted tokens are rewarded to stakers, double exposure to price gains from Eth and WISE etc.) that make WISE superior to other crypto projects and I’d be happy to answer any of your questions.
If you are at all interested in using WISE as an investment vehicle to earn more Eth, feel free to reach out to me at stakingwiseinfo@gmail.com. I offer free consulting and will answer any questions about WISE and Eth. If you do find that the project is something that you would like to explore further I can walk you through all the steps to help you meet you financial goals, even if you have never owned a crypto currency before. All I ask is that if you find my help useful please use my referral link when staking your WISE tokens, and by using my referral link you will earn 10% more interest earning power on your stakes. Referral Link: https://wisetoken.net/?w=0x014aBd77c23E3E0539c82a4a6d2e9dc64626daa8
